CHINA.WIRE
China's economic growth misses forecasts in second quarter
 Beijing, July 15 (AFP) Jul 15, 2026
 China's economy grew slower than expected in the second quarter of the year, official data showed Wednesday, even as strong exports driven by the global AI boom helped offset trade disruptions caused by the Middle East war.

The 4.3 percent year-on-year expansion reported by the National Bureau of Statistics (NBS) for April-June, was short of the 4.5 percent forecast in an AFP survey of economists.

It was also short of the 4.5-5.0 percent annual rate targeted by Beijing, which is the lowest in decades.

A years-long crisis in the property sector and a persistent slump in domestic spending have left leaders reliant on exports to meet growth targets.

However, the US-Israeli war on Iran has threatened that as it choked off shipping through the Strait of Hormuz -- a vital transit route through which a fifth of global oil and natural gas normally passes.

"The economy has withstood pressure and operated within a reasonable range," the NBS said in a statement.

"Production and supply have grown quite rapidly. The employment situation has remained generally stable. Prices have risen moderately. Foreign trade has grown well. New growth drivers have grown rapidly," it added.

The NBS data also showed retail sales grew 1.0 year-on-year in June, beating a Bloomberg forecast of a 0.1 percent drop.

And industrial production rose 5.3 percent last month, topping a Bloomberg forecast of 4.6 percent.

But in a gloomy sign, fixed-asset investment slid 5.7 percent on-year in the first half.

The closely watched figures followed the release of data Tuesday that showed exports surged a forecast-topping 27.0 percent year-on-year in June as the global AI boom helped fuel demand for chips and computing equipment.

China's semiconductor exports more than doubled in value in June year-on-year, while data-processing equipment shipments rose 53.1 percent from a year earlier.

But that expansion was "entirely a price story caused by the ongoing shortage of memory chips", Julian Evans-Pritchard of Capital Economics said Tuesday, noting that the volume of semiconductor exports actually fell year-on-year in June.

Tensions with the United States and European Union remain a source of friction.

China remains locked in a simmering trade feud with the EU, with which it recorded a trade surplus of $32.9 billion in June.

And while ties between Washington and Beijing have stabilised since US President Donald Trump visited Beijing in May, a trade imbalance and rivalry over chip production persist.